Zimbabwe’s President Emmerson Mnangagwa on Wednesday pledged to introduce measures aimed at stabilizing the country’s gold-backed currency, ZiG, after it significantly declined on the black market just five months after its introduction. The currency was devalued by 43% last Friday, following a 47% loss on the parallel market.
Addressing parliament, Mnangagwa expressed concern over the resurgence of speculative trading in the parallel market, which has contributed to the currency’s instability. Since its devaluation, the ZiG fell further from 24.3902 on Friday to 25.2824 by Wednesday, with the black market rate hitting 32 per U.S. dollar.
Mnangagwa emphasized that the devaluation would create more flexibility in the official market and encourage foreign exchange trading through legal channels. He also confirmed that 50% of government royalties are being set aside to build reserves and back the currency.
This move marks Zimbabwe’s sixth attempt at achieving currency stability in 15 years, following severe hyperinflation under former leader Robert Mugabe. Meanwhile, the Bankers Association of Zimbabwe has warned that the recent currency depreciation may lead to price hikes and weaken public confidence.